Today we would like to share with you three timely real estate trends we are keeping an eye on in SW Florida.

Timely Real Estate Trends

The first is median time to contract.  This is the amount of time it takes the average property to go under contract for sale.  As you can see from the chart, it rose to 79 days.  That is a 11.3% rise from last year in June, and up considerably from May’s 47 days.  For the year however, we are still at 64 days, which is down 9.9%.  We will be keeping our eye on this metric.

Timely Real Estate Trends Median Time to Contract

Secondly, we are looking at new pending sales which were up 28.3% in June.  Some of this is pent-up demand from the previous months and some is the fact that interest rates are at historic lows.  Buyers do not want to miss out on this opportunity.

Timely Real Estate Trends New Pending Sales

Lastly, we are looking at new listing inventory.  New listings rose 9.6% in June 2020 over June 2019.  The issue is, new pending home sales were up 28.3% in June and up 2.2% in May, while new listings were down 1.6% in May and down 33.7% in April.

New Listings June 2020 Timely Real Estate Trends

You cannot have new listings down over 30% and new pending sales up 28% without it eating into existing inventory.  Existing stood at 4,090 listings in June, which was down 28.5% from last year.  This is a direct correlation between the three metrics we are analyzing in this article.

It is possible this market just re-balanced to the levels we are at today.  Or, it could be that sales are not higher than they are simply because there is not enough inventory to sell.  In other words, perhaps sales would be higher if there was more inventory.

We are seeing the most housing inventory gains coming in the $250,000-$300,000 range and in the $400,000 and up range. Inventory is down below $250,000 and flat between $300,000-$400,000.

Other Timely Real Estate Trends

Another trend we are seeing is agents from Miami coming over here with their clients and attempting to sell property over here.  Official June numbers show Palm Beach, Broward, and Miami-Dade areas with 3.9 months supply of homes on the market.  Lee County has 3.6 months, so technically we have less supply than they do relative to number of home sales.  It is possible they dipped recently and are sniffing over here for available properties to sell.

We saw this trend back around 2005.  It’s not fun because usually they have pre-qualification letters from Miami based lenders and we did not always find them to be legitimate.  More times than not, those buyers failed to qualify even though they had an out of town lender tell us they were golden.  It got so bad that local Realtors would require a local lender look at the buyer to make sure they were indeed qualified.  When I look at a pre-approval letter, I want to know that buyer can perform before taking it off the market for our seller.

The buyer may have been qualified, who knows.  In the end, the lender could not get the job done, and that gave agents fits because they worked so hard to find a qualified buyer only to find out they weren’t qualified, or the lender couldn’t perform.

No matter where you purchase, we tell customers to use a local lender, or a national lender with a reputation for results.  Otherwise local agents won’t trust your pre-approval letter and your offer may not get accepted, especially if there are multiple offers.  You do not have to use the local lender, just get a pre-approval from one so the sellers know you are qualified.

Realtor You Hire Matters

In a shifting market, the Realtor you hire matters.  This is true on the buying and selling side.  Always work with an agent that has years of experience in all kinds of markets, and several hundred if not thousands of homes under their belt.  The Realtor makes good money, and they are worth every penny when you need them.  It’s times like this when you really need experience you can count on.

Feel free to call Brett and Sande Ellis 239-489-4042 Ext 4.  We’re here to help.  Or visit www.swflhomevalues.com for a free home value analysis.

See last week’s article “Refinance Existing Home Versus Sell and Purchase New Home

Watch the Future of Real Estate

A few weeks ago, we wrote about how strong closings have been in 2018.  This week we’ll talk about two more indicators that help us evaluate the health of the market; median time to contract and dollar volume.  Currently median time to contract date 63 days this year.

Median Time to Contract Date 63 Days This Year

The median time to contract is 63 days this year.  This is measured by taking the number of days from listing to time of pending contract.  In other words, it’s taking just over 2 months for homes to go under contract.  If you have a home on the market and it’s taking longer than that, it’s either not being marketed correctly, it’s overpriced, or both.

Because the market has been strong in 2018, the median time to contract is down 4.5%. It’s taking less time to sell homes this year than last.  In the past month or two we’ve seen listings increase, and yet the market has gobbled up many of these listings.  This tells us buyers are out there and ready to buy, but at the right price.  Even in a hot seller’s markets some sellers seem to overshoot the market.  Ask all those sellers in 2005 and 2006 who were on the market and failed to sell if they’d love to have that opportunity back.

Some sellers will always be too greedy for the market.  There’s a term for them.  They’re called Expireds because they were never priced to sell at the market.  It might not be their fault.  If they demanded more than the market would bear, it is.  Perhaps they listened to their agent who didn’t really know that market, or really needed a listing badly and convinced the seller they could sell it higher than any other agent.  I guess you could say it’s the seller’s fault for listening to the wrong people, but how is a seller to know for sure?

We see the same mistake from buyers.  They low-ball sellers and seem to come up short on every offer.  Their goal was to purchase a house, and yet they see everyone else buying but they can’t seem to score a deal.  Greed is getting in their way, just as it does for sellers who overprice.  Greed prevents more buyers and sellers from accomplishing their goals than anything, followed closely by fear.

People have a fear of making a mistake, so often they do nothing.  The sad reality is doing nothing may very well be the biggest mistake they could make.  A seller riding the market down is no fun.  A buyer watching interest rates rise while they sit on sidelines is no fun either.

Dollar Volume Lee County Florida Median Time to Contract Date 63 Days This Year

Getting back to the market, the other indicator we watch is dollar volume. Dollar volume is the cumulative total of all sales.  It is of course influenced by the number of closings and the average price.  As you can see, dollar volume of sales was up 12.9% in August and up 14.9% year to date.  By all accounts, 2018 has been a very good year for real estate sales.

Waiting in this market can be a costly mistake, both on the buy side and the sale side.  It pays to work with a professional that knows the numbers.  I can assure you, agents on the Ellis Team know the market numbers.

If you’re looking to sell a home, call Sande or Brett Ellis at 239-489-4042 Ext 4.  If you’re looking to buy, our team of friendly and knowledgeable agents can help you too.  Don’t forget to check out www.LeeCountyOnline.com  It has all the listings, and it’s updated instantly, so you’ll know about hot new listings before other buyers and sellers on those other sites.  Sometimes they take days to update, and sometimes listings are missing because the agent decides not to list them there.  We have all the listings.  You can even find out what your homes is worth online too.

Always call the Ellis Team at Keller Williams Realty 239-489-4042.  We’ll take good care of you, and give you the straight scoop with what’s really going on in the market!

Ellis Team Weekend Open House

Saturday October 20, 2018 11AM -2 PM

 

Let’s start with what we know and work backwards.  Homes priced $200,00 or less are flying off the shelves with multiple offers.  Homes up to $250,000 are as well in some neighborhoods, but not all.  This assumes the home is in good condition and priced correctly.  So, you might wonder why we’re asking the question, are changes brewing in Southwest Florida real estate market?

Buyers are still buying; however, we’re noticing they’re price sensitive now.  Prices have gone up so much perhaps it’s testing the limits of what buyers can or will pay.  Sellers are counter-offering offers and buyers aren’t just accepting that.  They are negotiating back and forth until both are happy. Some buyers are walking from counter-offers.  We’ve seen this over the years and it appears it’s no longer a seller’s market across the board.

Changes Brewing in Southwest Florida Real Estate Market median time to contract

The numbers from June seem to bear that out as well.  The median time to contract jumped 7 days in June from May’s numbers, and 9 days from last year.  It’s taking longer to get contracts on houses.  It’ll be interesting to see July’s numbers in a few weeks.

Changes Brewing in Southwest Florida Real Estate Market Median time to sell

Median time to sale also jumped to 117 days.  That’s a 11.4% increase from last year.  New listings are up 5.8% and new pendings were down 1.6% from last year.  Could these be leading indicators for sales in months to come?

So, what’s the takeaway here?  Sellers need to take a good hard look at their price and make sure they’re competitive.  If your home has been on the market awhile, it may be time to re-evaluate where you stand.  New listings could have come on the market and become instantly more attractive than your home, or other sellers may have reduced their price.  Both events can affect you.  Sometimes as little as $2,000 in some sub-markets can be the difference between selling and sitting.

We are in a price sensitive market, primarily because prices have risen and stretched home buyers thin.  They simply can’t purchase as much home as they could have a year ago.  We warned buyers this would happen.  And we’re warning sellers not to get too greedy now.

Prices are good.  Buyers are buying.  We don’t have a runaway market where the seller gets to dictate all the terms.  Buyers and sellers are on even ground right now, and price matters.  Sellers, you’re not in competition with the buyer.  You’re in competition with all the other sellers out there competing for your buyer.

Buyers, same thing.  You’re not in competition with the seller.  You’re in competition with all the other buyers out there for the best properties.  The best valued homes always sell fast. You don’t want to be late to the table and eating scraps when you could have had the best.  Be prepared. Get your financing in order so you can jump when that property hits the market.

To take advantage of opportunities in this market we’d suggest sitting down with us and going over your objectives.  As a buyer, we can show you the best homes and eliminate the rest. Wasting time on the junk takes away time looking at the good stuff.  That can be the difference between success and failure.  Let an Ellis Team professional work with you and save you time.  We have some other tips for you as well that we’ll save for when we meet.

Sellers should have the same sit-down with us.  We’ll educate you on the market, look at your competition, and show you how we market better than anybody.  This can be the difference between selling and sitting on the market.

Feel free to search homes at www.LeeCountyOnline.com  Our database comes directly from the MLS and is always up to date, unlike some of these other sites with bad or outdated data.

You can always call us at 239-489-4042  We’d love to help you buy or sell your next home in paradise!

Ellis Team Weekend Open Houses

Open Sat 1-3 PM

13812 Lily Pad Cir Gate 2 Reflection Lakes

Reflection Lakes

13812 Lily Pad Cir

3 Bed, 2 Bath, 1,474 SQ Ft 2 Car Garage-Gated Community

$250,000

 

Open Sat 2-4 PM

Lakefront Condo with 2 Car Garage

Fisherman’s Cove

10081 Lake Cove Dr Unit 101

3 Bed, 2 Bath 1,564 SQ Ft 2 Car Garage

$227,500

 

Open Sun 1-4 PM

Daniels Park 3 Bed + Den

Daniels Park

14011 Danpark Loop

3 Bed, 2 Bath 1,830 Sq Ft Gated Community

$275,000